NAOS CEO Insights

CEO INSIGHTS – Week Ending 21 May 2021 By NAOS Asset Management

May 21, 2021

“While some of the near-term [semiconductor] demand can be attributed to segments such as automotive catching up after a year of COVID slowing, there is an undeniable new wave of growth on the horizon as every vertical market demands machine learning chips” Aart de Geus, Co-CEO, Synopsys, Inc. [major global semiconductor company]

CEO INSIGHTS – Week Ending 21 May 2021 By NAOS Asset Management

“While some of the near-term [semiconductor] demand can be attributed to segments such as automotive catching up after a year of COVID slowing, there is an undeniable new wave of growth on the horizon as every vertical market demands machine learning chips” Aart de Geus, Co-CEO, Synopsys, Inc. [major global semiconductor company]


As part of the NAOS investment process, we pay particular attention to the comments made by company CEOs and business leaders in order to gain a greater understanding of the current investment environment and key trends that may be emerging. Below are quotes from the week which in our view detail some of the most important and prominent industry trends and economic factors impacting their businesses.  
 
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Energy

“We have a buoyant and transforming energy sector. It is indeed an incredible moment for us and for the industry...Renewables development is booming and the world is expecting to more than triple its renewable capacity over the next 20 years” Catherine MacGregor, CEO, ENGIE S.A [world’s biggest independent power producer]

Commodities

“If you look at the remainder of this year, the demand in China and demand in the rest of the world is really just growing very, very quickly and that makes perfect sense, because when you step back and think about where you're using aluminium, it's in transportation, it's in consumer durables, it's in electrification, it's in automotive.” Roy Harvey, CEO, Alcoa Corporation [top tier global aluminium producer]

Agricultural Property

“Demand for farmland real estate is expected to continue to be fuelled by a favourable commodity price outlook, low interest rates and good seasonal conditions” Market Statement, Elders Ltd

Agriculture

“Meat and Livestock Australia has revised down cattle slaughter forecasts to their lowest level in 36 years and a fall of 11% on 2020 levels. The national cattle herd is also coming off its lowest level in 25 years, in 2020” Hugh Killen, CEO, Australian Agricultural Company

“Australian beef price or selling prices is very, very high” Wesley Filho, CEO, JBS SA [world’s biggest meat processor]

Global Economy & Trade

“The business environment has changed sharply, compared to three years ago...The prolonged impact of COVID-19 trade friction between the United States and China and increase in your raw material costs are all having an effect” Satoshi Tsunakawa, CEO, Toshiba Corporation

Automotive

“The extension of the instant asset write-off, now referred to as temporary full expensing, through until June 30, 2023 will further underpin strong market demand” Keith Thorton, CEO, Eagers Automotive Ltd

Technology

“We expect the [chip shortage] situation…will get worse in the first quarter [Apr-Jun]. We expect some kind of an improvement in the second quarter [Jun-Sep]” Guenter Butschek, CEO, Tata Motors Ltd [automotive conglomerate/owner of Jaguar Land Rover]

“While some of the near-term [semiconductor] demand can be attributed to segments such as automotive catching up after a year of COVID slowing, there is an undeniable new wave of growth on the horizon as every vertical market demands machine learning chips” Aart de Geus, Co-CEO, Synopsys, Inc. [major global semiconductor company]

Entertainment

“Everybody knows that consumers come over to streaming for the breadth of content and to be able to watch it when they want. What I think a lot of people in the industry missed back in the day was that the number two reason for most consumers to come over to streaming was to basically save money from their over inflated cable bills” Steve Louden, CFO, Roku Inc [multinational TV streaming platform]

Food, Beverage & Hospitality

“Pent-up demand for beer is expected to eventually lead to rebound in brewing volumes” Market Statement, United Malt Group Ltd

“The hiring demand [in hospitality] is increasing at a rapid speed...In the past 2 or 3 decades, this is the most difficult period to hire someone” Hisayuki Idekoba, CEO, Recruit Holdings Co Ltd [one of the largest HR/staffing companies in the world]

Labour Markets & Employment

“Many companies have downsized these [internal] hiring teams and suddenly, with the end of COVID-19 pandemic in sight, companies may want to hire more people. But because they have already downsized their hiring teams, they need to hire people to be in the hiring team. That’s the situation many companies find right now” Hisayuki Idekoba, CEO, Recruit Holdings Co Ltd [one of the largest HR/staffing companies in the world]

Classifieds

“Most of the players in the legacy Yellow Pages space around the globe have been tempted to address the challenges that we all have faced by hoping to land some magical new product, and the siren song of that has been heard very loudly with a lot of money being wasted in that direction” David Eckert, CEO, Yellow Pages Ltd

Domestic Economy

“The biggest issue we are most anxious about right now is consumer confidence — actually now it is pretty good. But it is hard to believe it will continue” Brad Banducci, CEO, Woolworths Group Ltd

Travel, Leisure & Accommodation

“The two trends [booking larger style homes & outside of city locations] I do think are going to invert and we are going to see a recovery of urban travel and a recovery of cross border” Brian Chesky, CEO, Airbnb Inc

“Leisure demand is growing strongly, with deferred international holidays converting into multiple domestic trips” Market Statement, Qantas Group Ltd

Retail & Consumer

“You can't plan on anything in the age of COVID. You can hope, but you can't forecast based on hope” Nick Woodman, CEO, GoPro Inc

Important information: This material has been prepared by NAOS Asset Management Limited (ABN 23 107 624 126, AFSL 273529) (NAOS) for general information purposes only and must not be construed as investment advice. Certain economic, market or company information contained in this material may have been obtained from published sources prepared by third parties. Nothing contained herein should be construed as granting by implication or otherwise, any license or right to use such third party content without the written permission of the owner.